Crude Oil Trades Near $80 After Rising on U.S. Supply Decline

Nov. 5 (Bloomberg) -- Oil traded near $80 a barrel in New York after climbing to a one-week high yesterday as a government report showed supplies unexpectedly declined in the U.S., the world’s biggest energy user.

Crude stockpiles fell 3.94 million barrels last week, the U.S. Energy Information Administration said yesterday. A 1.5 million-barrel increase was forecast, according to a Bloomberg News survey of analysts. Oil also advanced as the dollar weakened against the euro, bolstering the appeal of commodities as an alternative investment.

“The EIA report provided some support and the U.S. dollar was soft, helping the oil price,” David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney, said by telephone.

Crude oil for December delivery traded at $80.15 a barrel, down 25 cents, in electronic trading on the New York Mercantile Exchange at 8:44 a.m. Singapore time. Yesterday, the contract rose 80 cents, or 1 percent, to settle at $80.40, the highest close since Oct. 23. Prices have gained 80 percent this year.

The dollar traded at $1.4866 against the euro at 8:48 a.m. in Singapore, after sliding as much as 1.3 percent yesterday, the biggest intraday decline since Sept. 8. It touched $1.4909, the weakest level since Oct. 27.

Stockpiles of crude fell to 335.9 million last week, the Energy Department said. Imports of crude oil dropped 764,000 barrels, or 8.6 percent, to 8.13 million barrels a day, the lowest level since Aug. 14, the report showed.

Gasoline Supplies

“The overall picture is one where gasoline demand has stabilized and maybe recovering slightly,” Moore said. “Distillate fuel demand still remains extremely weak.”

Gasoline stockpiles fell 287,000 barrels to 208.3 million last week. A 400,000-barrel increase was forecast, according to the median of 17 responses in the Bloomberg News survey. Distillate supplies dropped 378,000 barrels to 167.4 million, the report showed. A 1 million-barrel decline was forecast.

Total fuel demand over the four weeks ended Oct. 30 was 4.5 percent lower than the same period a year earlier, the report showed. Refineries operated at 80.6 percent of capacity, down 1.2 percentage points from the previous week and the lowest rate since the week ended April 10, the department said.

Brent crude for December settlement rose 78 cents, or 1 percent, to $78.89 a barrel on the London-based ICE Futures Europe exchange yesterday.